Kisumu has imposed a 30-day closure on all short-stay rentals in the county, a move aimed at curbing rising crime associated with the units.
The county government issued the order with immediate effect as of Tuesday, October 8, marking the latest attempt to tighten regulations on the industry. According to Kisumu City Manager Abala Wanga, this pause in operations is designed to give property owners time to heighten security measures.
The decision follows a concerning trend of crimes linked to short-term apartments, including incidents where young girls were reportedly lured into fully furnished apartments and coerced into inappropriate activities. While addressing the media, Wanga highlighted the need for operators to take this window seriously, urging them to boost vigilance and meet the county's expectations to prevent further insecurity.
This is not the first time Kisumu has targeted these units. In January, the county mandated that all short-term rentals register with local authorities and obtain a one-year licence.
The goal was to regulate an industry that has increasingly been viewed as contributing to lawlessness. At the time, officials warned that failure to comply with these rules would result in penalties, including potential closures.
The pressure on short-stay rental operators is not limited to Kisumu. Nairobi is experiencing similar scrutiny, with investors across the country now required to comply with stringent regulations.
All operators must register their businesses with the Tourism Regulatory Authority (TRA) and provide proper documentation, including lease agreements that clearly outline their short-term rental arrangements. Additionally, units must be inspected for safety before they can be approved to operate.
One of the sticking points for operators is the classification of units under 'serviced apartments.' This system groups studios, one-bedroom, two-bedroom, and even three-bedroom properties into the same category, imposing a Ksh26,000 annual licence fee, regardless of the number of units. Investors have voiced concerns over this blanket classification, arguing that it unfairly burdens smaller operations.
The tension between short-term rental operators and regulators extends beyond licensing fees. Many operators are pushing for clarity on whether short-stay rentals hosts who are not landlords and do not generate rental income should still be subject to rental income tax.
Additionally, many argue that the Tourism Levy – a two per cent tax imposed on registered properties – is not being adequately enforced, with only 400 out of 40,000 listed operators complying with the law as of last year.
Meanwhile, short-stay rental operators generating over Ksh5 million in annual turnover face further tax obligations. Under Kenyan law, these hosts must register for VAT and apply it to their earnings, adding another layer of complexity to the already heavily regulated industry.
